Michelle Johnston Holthaus, Intel’s co-CEO and then executive vice president and general manager of the company’s Client Computing Group, holds a Intel Core Ultra processor as she speaks during the Intel AI Everywhere event in New York on Dec. 14, 2023.
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Intel issued disappointing quarterly guidance on Thursday, but reported earnings and revenue that topped estimates. Shares were up 3% after hours.
Here’s how the company did in the fourth quarter compared with LSEG estimates:
- Earnings per share: 13 cents adjusted vs. 12 cents expected
- Revenue: $14.26 billion vs. $13.81 billion expected
Intel’s revenue declined for a third straight quarter, decreasing 7% from a year earlier, according to a statement. The company’s net loss for the quarter totaled $126 million, or 3 cents per share, compared with net income of $2.67 billion, or 63 cents per share, in the same quarter a year ago.
It is the chipmaker’s first earnings report since announcing the departure of Pat Gelsinger as CEO. Gelsinger, who took the helm as CEO, had a difficult tenure, giving up market share to competitors and falling way behind in the artificial intelligence race while committing billions of dollars for manufacturing plants.
Intel appointed two interim co-CEOs, finance chief David Zinsner and Intel Products CEO Michelle Johnston Holthaus, to succeed Gelsinger.
“Dave and I are taking actions to enhance our competitive position and create shareholder value,” Johnston Holthaus was quoted saying in Thursday’s release.
The search for a new CEO is progressing, but there is nothing new to report, Zinsner said on a conference call with analysts.
Johnston Holthaus said the company has decided to only use its planned Falcon Shores artificial intelligence processor for servers as a test chip and won’t be selling it, based on industry feedback. In 2023, Intel said it would focus on Falcon Shores after canceling its Rialto Bridge graphics processing unit for servers.
Intel will now focus on a product called Jaguar Shores “to address the AI data center more broadly,” she said.
Adjusted results exclude stock-based compensation, acquisition-related adjustments and interest on an annulled fine from the European Commission.
Intel said it will report breakeven profit for the first quarter, with revenue of between $11.7 billion and $12.7 billion. The LSEG consensus was $12.87 billion in revenue and 9 cents in adjusted earnings per share.
Management pointed to seasonality, economic conditions and competition, and said clients are digesting inventory. The prospect of tariffs adds to the uncertainty, Zinsner said.
Intel’s Client Computing Group, which sells PC chips, produced $8.02 billion in revenue in the fiscal fourth quarter. Revenue was down 9% year over year but above the $7.84 billion consensus among analysts polled by StreetAccount.
“While difficult to quantify, we suspect a portion of Q4 revenue upside was due to customers hedging against potential tariffs,” Zinsner said.
The Data Center and Artificial Intelligence segment, which provides processors to cloud providers and corporate server farms, generated $3.39 billion in revenue. That was down 3% and in line with StreetAccount’s $3.38 billion consensus.
Intel’s Network and Edge unit contributed $1.62 billion in revenue, up 10% and above the $1.5 billion consensus from StreetAccount.
During the quarter, Intel finalized a $7.86 billion U.S. government grant to support manufacturing in four states.
The company expects volume chip production based on its 18A process technology in the second half of 2025, according to a presentation. Next-generation laptop chips carrying the code name Panther Lake will launch in the second half of the year, Intel said.
In October, CNBC reported that Intel was looking to sell at least a minority stake in Altera, its business that sells field-programmable gate array chips. Intel acquired Altera for $14.5 billion in 2015.
“We are, you know, far along on the process of Altera,” Zinsner said. “I suspect that by the time we get to earnings next, next quarter, we’ll have something to say there that will help generate some cash that we can use to deliver.”
Before Thursday’s close, Intel shares were down 1% for the year, while the S&P 500 index was up about 3%.
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